Google acquired image editing site Picnik today. Financial terms of the deal weren’t disclosed, but you can read the announcements by Picnik and Google on their respective blogs.

This is interesting to me for a few reasons.

First, Picnik is the default image editing software built into Yahoo’s photosharing site Flickr. While nobody has yet suggested that Picnik will be getting the boot from Flickr, it would seem to me an awkward relationship at best for a Yahoo property to be using a Google owned service for part of their offering. I suspect that Picnik gets dropped by Flickr and replaced with some sort of new offering.

But second, you have to ask yourself why Google would buy Picnik and why now.

The most logical application for Picnik at Google, would be for Google to integrate the software into their photo sharing property Picasa which competes with Flickr. The fact that Google would allocate $$$ towards Picasa right now may signal that they are getting serious about finally mounting some reasonable effort at trying to displace Flickr as the photo social sharing King of the internet.

What else makes me think this? Google Buzz. While I consider Flickr superior in a lot of ways to Picasa today, the biggest advantage that Flickr has always held over their competitors is how strong a grip they’ve had on the social aspect of photo sharing. But now that Buzz has arrived on the scene (and your Buzz photos go into Picasa albums by default by the way), it would appear that Google finally has a viable social network to compete with Flickr’s own internal social network inside of Flickr. By combining the social power of buzz, with an enhanced version of Picasa, Google could mount a formidable competing offering to Yahoo’s Flickr.

Personally I hope this is the case. Why? Because Flickr needs competition. Not only have they grown lazy in terms of innovation (because they can), they treat their users and their users’ data disrespectfully (because they can) censoring users and nuking whole communities on their site. With a stronger competitor out there it may force Yahoo to finally begin beefing up Flickr as well as treating their users better than they have been.

I’ve been actively using Picasa for the past few weeks after not really using them for years, mostly because of their integration with Buzz. They are still a long ways away from Flickr. Flickr today is a much more elegant offering with far better organizational capabilities and a huge body of work already on the site which carries weight. But with the right engineers hacking on Picasa and the right $$$ being allocated from Google, I’m pretty sure Picasa could in fact build a better Flickr. Combining the social sharing aspects of Buzz with a beefed up Picasa from Google, would be a formidable offering on the social photo sharing space.

Certainly integrating Picnik into Picasa (weird how their names are so similar) will enhance Picasa a bit. But here are the things I think Picasa should also be working on if they want to offer viable competition to Flickr.

1. Picasa should redesign the service around the concept of the photostream. By default Picasa only has album views. But people think in terms of streams much of the time. Flickr has a stream AND albums (sets). Picasa just has albums (and sort of clunky albums at that). By retooling the site with a photostream as a primary view, Picasa would feel more comfortable for people who wanted to migrate away from Flickr and towards Picasa. Picasa could still have albums (just like Flickr has sets), but a photostream should be the primary main view.

2. Picasa needs better organizational tools. Flickr’s organizer is *amazing*. In fact, it’s probably what I’m impressed with more than anything that they’ve ever done. The ability to batch organize photos is powerful. Picasa’s not as much. One very easy thing Picasa could do right away to improve their organizational capabilities would be to introduce SmartSets. SmartSets allow you to build albums/sets around the concept of tags. I can say, for instance, put all of my photos that are tagged/keyworded “neon” into my neon album/set. There could be better support this way for overlapping albums as well. I might have a Golden Gate Bridge album (for instance) that had all my Golden Gate Bridge photos. But those photos could also be in a SmartSet for my San Francisco photos too.

3. Picasa should make blogging photos easier. Flickr has super easy html code that you can easily cut and paste and then use to blog. Picasa allows this too but with more complicated tables that are difficult to custom size and are harder work to use. Picasa could easily copy flickr’s approach and get more traction from bloggers wanting to use Picasa to host their photos.

4. Picasa needs a better “Recent Activity” view. “Recent Activity” may be the most viewed page on Flickr for active users. Picasa needs a better way for you to easily and quickly view what’s going on with your photos. Likes/comments/tags/etc. in a central page view on Picasa.

5. Picasa needs a super easy to use Flickr-Picasa importer. Our photos belong to us. Not Flickr. So does the metadata (tags, geotags, etc.) associated with our photos. Much of this data today is trapped in the silo that is Flickr. Picasa should build an application that makes it super simple to (with the press of a button) transfer all of your Flickr photos (and metadata) easily over to Picasa. If Flickr won’t grant Picasa a commercial API key for this, then Google/Picasa should make a point of publicizing that Yahoo/Flickr is not serious about user data portability and a more open and relevant web.

There is a ton more that Picasa could do to compete with Flickr. Hopefully today’s announcement of Picnik is but a first step in a serious attempt by Google to build a viable competitor to Flickr.

Congratulations, by the way, to the Picnik team on today’s exciting announcement.

Some rumors are now floating that Yahoo will try to acquire Aviary, probably just because Aviary is Picnik’s biggest competitor. I’ve been using Picasa for 2 years now and love the service, but have always wished they had a bigger focus on it – hoping this is a sign of that.

I checked their prices – $50/yr for 200 gigs of storage, $100/yr for 400 gigs. It’s more than Flickr but within budget. My hope is their prices per gig fall in the first year I’m on it. I think I’ll start double-uploading to Flickr and Picasa in a few weeks.